42-1124. Failure to affix stamps or pay or account for tax; forfeiture of commodity; sale of forfeited commodity; effect of seizure and sale; request for administrative hearing; definitions

A. If the department or its authorized agents or representatives discover any luxury subject to tax under chapter 3 of this title to which official stamps have not been affixed as required or on which the tax has not been paid or accounted for, the department or its agent or representative may seize and take possession of the luxury, and it is deemed forfeited to this state. Except as provided in subsection D or E of this section, the department, within a reasonable time thereafter, pursuant to a notice posted on the premises or by publication in a newspaper of general circulation in the county where the sale is to take place, not fewer than five days before the date of sale, shall offer for sale and sell the forfeited luxuries. The department shall pay the proceeds of the sale into the state general fund. The sale shall take place in the county that is most convenient and economical. The department need not offer any property for sale if, in its opinion, the probable cost of sale exceeds the value of the property.

B. The seizure and sale do not relieve any person from the penalties provided for violating this title.

C. The department of revenue may enter into an interagency agreement with the department of transportation for the purpose of carrying out tobacco enforcement under chapter 3 of this title at ports of entry.

D. All tobacco products that are seized for violations under this title shall be forfeited to this state. All tobacco products that are forfeited to this state pursuant to section 13-3711, 36-798.06 or 42-3461 or section 44-7111, section 6(b) shall be destroyed. If a distributor defrauds this state by knowingly and intentionally failing to keep or make any record, return, report or inventory pertaining to tobacco products, by refusing to pay any luxury tax for tobacco products subject to tax under chapter 3 of this title or by attempting to evade or defeat any requirement of this title, the distributor shall forfeit to this state all fixtures, equipment and all other materials and personal property that are located on the premises of the distributor. Alternatively, at the request of the department, the distributor may be enjoined by an action commenced by the attorney general or a county attorney in the name of the state from engaging or continuing in any business for which a tax is imposed by this chapter until the tax has been paid and until the person has complied with this title.

E. The department may sell or otherwise dispose of any tobacco products forfeited to this state on such conditions as it deems most advantageous and just under the circumstances, unless the tobacco products are forfeited pursuant to section 13-3711, 36-798.06 or 42-3461 or section 44-7111, section 6(b). The department shall deposit the proceeds of any sales made pursuant to this subsection in the state general fund.

F. The department shall give notice of the seizure and forfeiture of tobacco products described in this section by personal service or by certified mail to all persons known by the department to have any right, title or interest in the property. Notice shall include a description of the tobacco products seized, the reason for the seizure and the time and place of the seizure. For seizures of cigarettes of more than sixty-one cartons of two hundred cigarettes each or the equivalent in cigarette count, the department shall post and maintain an online notice of seizure and forfeiture on its website for a period of at least six months, beginning not later than ten business days after the date of the personal service of the notice to a person or the date of the mailing of the notice. The online notice shall display the date on which the department posts the notice to the website, which shall serve as the date of publication of the notice.

G. Any person whose legal rights, duties or privileges are determined by the notice of seizure and forfeiture may file a request for an administrative hearing with the department on a form prescribed by the department. The request for an administrative hearing shall contain a statement of the petitioner's interest in the tobacco products and an explanation of why the release or recovery of the tobacco products is warranted on the ground that the tobacco products were erroneously or illegally seized.

H. The seizure and forfeiture of tobacco products by the department is an appealable agency action as defined in section 41-1092 and is governed by title 41, chapter 6, article 10 and section 42-1251, except that:

1. A request for an administrative hearing that is filed under subsection G of this section is deemed to be timely filed if the request is filed with the department within ten days after the date of personal service on the petitioner or the date of mailing the notice to the petitioner. Any person not served personally or by mail shall file the request within ten days after the date of publication of the notice. The failure of a person to file a timely request constitutes a bar to that person's right to any interest in the tobacco products, except insofar as the rights of that person may be established in an action filed by the department under this chapter.

2. If a request for an administrative hearing is not filed with the department at the expiration of ten days after the notice has been personally served, mailed or published, the department's determination is final. If a timely request for an administrative hearing has been filed with the department, the department shall request a hearing by the office of administrative hearings and the department shall suspend action until the final order of the department has been issued. An order that is issued by the office of administrative hearings is the final order of the department thirty days after the petitioner receives the decision unless a decision by the director is issued pursuant to section 42-1251. If the director issues a decision, that decision is the final order of the department.

I. For the purposes of this section, " cigarette" , " distributor" and " tobacco products" have the same meanings prescribed in section 42-3001.